THE PRESIDENT: Thank you all for coming. Thanks for your interest
in this country and its future. We've got some big challenges ahead of
us. We've got an opportunity to make the world a more peaceful place,
and a freer place. And I believe, as a result of the resolve of the
United States of America, the world will be more peaceful, and the
world will be more free. And here at home, we've got a challenge with
our economy. I mean, frankly, it's not strong enough; it is not robust
enough. Anytime somebody is looking for a job and can't find one means
we've got to work together to create jobs.

Now, the role of government is not to create wealth; the role of
government is to create an environment in which the entrepreneurial
spirit can flourish, in which people are encouraged to invest and save,
in which there's confidence in the future of the country. And that's
what we're here to discuss today.

I want to thank John Snow for agreeing to serve in our
administration. He came at a pretty tough time. (Laughter.) Some
people would have said, well, I don't think I want to take on the job
unless everything is precooked and the markets will be surging. But he
realized that this country needed all of us pulling together. So I
asked him; I said, would you be willing to leave the private sector to
serve America, and he said yes. And I'm thankful for that. I'm glad
to have him on my team.

His job is to talk about our program all around the country, and
particularly in the halls of Congress, and convince them about the
wisdom of what we're proposing.

Speaking about halls of Congress, John mentioned George Allen, the
Senator from Virginia. I'm glad that George is here. And Don Manzullo
from Illinois is here, too. I'm honored both you guys came. I
appreciate your interest. I look forward to working with you and your
colleagues, both Republicans and Democrats, to do what's right for the
American people.

I want to thank Chuck Schwab, as well, for coming. He's a --
he is a leading entrepreneur in the country. Built his own business.
Tomorrow, when I go down to Florida, I'm going to talk about the dreams
for small businesses that grow to be big businesses. This is a guy
that took a small business and grew it into a big business. It's
really what America is all about, is to have unlimited horizons for
people to take risk so they can achieve dreams, no matter what their
status in life may be. And the Schwab Company certainly is --
represents the great entrepreneurial spirit of our country.

I also want to thank Susan Meisinger and David Hutchins who run the
Society for Human Resource Management. Thank you for opening up your
hall. It's awfully thoughtful of you to let us come in here. I fully
recognize it's not easy to host a presidential entourage. (Laughter.)
But you did it. And thanks for giving us a chance to come and talk
about how we're going to address some of the big challenges here at
home.

My attitude about the economy is that, first, we've done a pretty
remarkable job here in America of overcoming some difficulties. The
first three-quarters of the year 2000 were recessionary. They were
negative growth. Fortunately, we passed tax relief, which -- based
upon the principle, if people have more of their own money, they're
likely to spend it; and when they spend it, somebody's likely to
provide a good or service; and when somebody provides a good or
service, somebody's more likely to find work.

And I think most economists would tell you that the recession --
most objective economists -- would tell you that the recession was
shallower as a result of the initial tax relief package that both the
Republicans and Democrats voted for.

Then the terrorists hit us. And people of Virginia know full well
the impact of the terrorist attack on the Pentagon and this part of the
world. Of course, the people in the great city of New York understood
the effect that it had, the terrorist attack had on the New York
economy. But it affected our whole economy. The airline industry
became -- had difficult times. We couldn't get projects started --
real estate, big building projects going -- because of the lack of
terrorism insurance. We actually dealt with that issue in the halls of
Congress, and hopefully big construction projects which will put our
hard-hats back to work will get going.

The country was resilient, though, and strong, determined to defeat
terror, and determined to go about our life, no matter what the threat
may be. And we began to recover. And then it -- then we found out
some of our fellow citizens, a few of the many executives which run our
companies thought they could lie and cheat. And that created a lot of
small investors -- and large investors, for that matter -- began to
wonder whether or not the numbers they were reading were accurate.
There was a loss of confidence in the markets because of the corporate
scandals.

And we dealt with that, and we're dealing with that. Pretty soon,
a good man named Bill Donaldson will become the Chairman of the SEC.
He knows what his charge is. His charge is to make sure that when an
investor, a member of an investor club opens up his or her portfolio or
the balance sheet of a company they've invested in, they know they're
reading true numbers, so we can regain confidence.

Our economy is growing, in spite of all of what I've just
described. But it's not growing strong enough. And so I went back to
the Congress and proposed a plan that is an aggressive plan, no
question about it. But the principle of the plan says, we trust people
in this administration. We trust the people to make wise investments.
We trust the people with their own money. We trust the moms and dads
to be able to save for their children. It's really the crux of the
economic plan. It says it's the people of America, it's the ingenuity
and hard work and wise investment capabilities of the American people
that make this economy strong and different and, therefore, the plan is
a plan that puts trust in people. It's a well-thought-out plan. As a
matter of fact, over 200 economists today enthusiastically embraced it,
said it's a good idea.

The first part of the plan has to do with your income tax levels.
It says, everybody who pays taxes ought to get relief. The role of the
government is not to try to pick and choose who the good taxpayers are
and who the bad taxpayers are. If you pay taxes, you ought to get
relief.

Of course, that was already passed in the year 2001. We also are
phasing -- we're increasing the child credit to $1,000, over a period
of time; reducing the marriage penalty over a period of time; reducing
the bottom rate from 15 percent to 10 percent.

So what we've said to the Congress is, you've already passed all
this. You've already accepted the major principle involved in tax
relief, which is, trust American people with their money. You've
already seen the effects of what a tax relief plan can do. Just
accelerate what you've already got on the books. Take that which you
have passed, and instead of phasing it in over three or five years,
let's move it this year. If the economy needs a little extra oomph, if
more money needs to go into the pockets of our people, so as to
encourage economic vitality, why wait? You've been through the debate,
you've already talked about the principles involved. Move it up.

This will affect 92 million Americans who will receive, on average,
a tax relief of $1,083. Now, some in Washington may say to us, that's
paltry, that's not enough. Uh-uh, $1,083 is a lot of money for people,
particularly when you think about the effect it will have on our
economy when millions of Americans take that and invest it, or buy
things with it. It will have an effect that will increase the economic
vitality of America.

You hear a lot of talk about stimulative, what's stimulative,
what's not stimulative. We anticipate that this plan -- this aspect
of the plan is over $50 billion in the economy this year. You see, I
plan to get them to not only accelerate the tax relief, I'm going to
ask Congress to make it retroactive to January 1st, so it will have an
immediate effect on the economy. That's what's needed. The timing of
tax relief is important, just as important as tax relief is.

And so I'm optimistic that Congress was wise once, and they'll be
wise again on the same plan. This also will have an effect on small
businesses. Tomorrow I'm going to Florida to talk to small business
owners and entrepreneurs, and what Americans and Congress must
understand -- I know George Allen understands this, Don understands
this -- is that most small businesses pay tax at the individual tax
rate.

When you hear somebody say, I'm a sole proprietorship, that means
you're paying information income taxes. If you're a sub-chapter S, or
a limited partnership, that means you're paying individual income
taxes. And so when you reduce income taxes, you're really putting
capital in the hands of small business owners, and capital, extra
money, gives that person a more likely -- a chance to expand. And
expansion means jobs. And by far, the vast majority of new jobs in
America are created by small business owners. And so this tax plan not
only helps our fellow Americans save, it also helps small business
owners with additional capital. It's like a huge capital infusion into
the small business sector of America.

On top of that, I'm asking Congress to allow small firms to write
up to $75,000 worth of equipment in the year in which they spend it, as
opposed to limiting the deductions to $25,000. And that means a lot
for small businesses. When a person can deduct an additional $50,000
of capital investment, it means you may have the small business person
invest in one extra machine. But when that's multiplied all across the
country, all throughout America, it means the machine manufacturer is
more likely to be able to provide jobs. It means the business that
buys the machine becomes more efficient. It means somebody is probably
needed to operate the machine so that there's extra employment there.
It will have a ripple effect throughout our economy, which is very
important for our fellow Americans to understand.

The other thing I want to talk to you about is the dividend
proposal. In America today we tax corporate income profits -- which
is fine, we should; it makes sense. But then we take that profit and
distribute it to a shareholder in the form of a dividend -- one of
the owners of the company. And then he gets taxed again, and that
doesn't make sense. You don't want to keep taxing capital. If capital
equals jobs, you really don't want to tax it but one time, it seems
like to me. It makes sense.

So when people in America hear us talk about the elimination of the
double taxation of dividends, they've got to understand we're doing so
with two things in mind: how do we improve the lot of our fellow
Americans; and what do we do to increase jobs. If somebody is looking
for work out there, and capital equal jobs, therefore, the more capital
available for investment, the more likely it is he's going to find
work, or she's going to find work. And that's what we're here to talk
about today.

The idea of allowing people to keep more of their own money is
particularly important for many of our retired citizens. You've got a
person who's worked all their life, and they've got medical bills,
maybe, piling up, particularly since Medicare isn't all that effective
these days for some. Or you're worried about your grandkids'
education. But really what you're worried about is you want to make
sure that you have got a comfortable existence.

Ten million senior Americans receive some sort of dividend income.
It certainly makes sense to me that if part of good policy is to
encourage job creation with more capital, it's a nice dividend, so to
speak, to allow our seniors to have more money, as well. So this
relief plan will immediately give seniors $800, on average a year more
money, which is vital for their retirement. It's a plan which affects
people's lives in a positive way.

Secondly, this is a nation of investors. It used to be when you
talk about stocks and bonds -- it probably wasn't all that long ago
-- you'd say, how's your portfolio? And that would probably pertain
to a handful of people that lived -- knew something about Wall
Street. There probably weren't a lot of them in Crawford, Texas, all
that long ago, saying, hey, my portfolio's good. How's yours? But
now, America's becoming a nation of owners and investors. We're a much
more sophisticated country when it comes to stocks and bonds.
Eighty-four million Americans own a stock directly and/or through a
pension plan. And so, therefore, policy, public policy, which affects
stock ownership, public policy which affects those who own equities and
those -- public policy which encourages ownership, makes sense.

I mean, after all, we want a hundred percent of our people to be a
part of the ownership society. The more somebody owns, the more
somebody is going to have a stake in the future of the country. We
want everybody to have their own home. We want everybody to have their
own balance sheet, their own savings, their own plans. And excluding
the double taxation of dividends rewards small investors; it encourages
stock ownership.

It also will have a positive effect when it comes to our corporate
America. And a lot of corporate America said, invest in me, the sky's
the limit. A fantastic growth potential, they say, you know? We may
not be making any money, but, hey, give me a shot. And that works in
some cases. But it also makes sense to have people say, invest in me
because you're going to get a steady source of the cash flow of my
company, I'm going to share it with you. We're proud that you took
risk in us, and in return we're going to give you a steady flow of
cash -- of the cash coming into the company through the form of a
dividend.

Eliminating the double taxation of dividends will encourage more of
corporate America to distribute profits and cash flow to their
investors through dividends. And that's good, that's a good corporate
reform. It's also good for encouraging the ownership society and it's
good for enhancing the lifestyle of millions of Americans all across
the country.

The getting rid of the double taxation of dividends is good
economic policy for the short-term for America; it is good economic
policy for the long-term of America. And I urge the Congress to
eliminate the double taxation of dividends. (Applause.)

One of the things we did before coming over here is we had a
roundtable discussion, sitting around a square table. (Laughter.) I
like -- I appreciate Chuck providing the square table --
(laughter) -- but I'm more appreciative of the members of the
roundtable who came to talk.

Now, we talked to Joan Hanover. She and her husband, George, were
visiting with us. They are near retirement -- retiring -- in the
process of retiring, meaning they're very smart, active, capable people
who are retirement age and are retiring. They receive $1,700
additional dollars a year when we get rid of the double taxation of
dividends. That is a significant amount of money for the Hanovers.
It's additional money that they can choose to do with what they --
they can do with their own money.

Part of the dialogue, by the way, the money we're talking about
today is not the government's money -- see, that's the other
important thing to remember. It's an important principle when it comes
to tax relief. It's your money we're talking about. And the Hanovers
are having more money to invest.

Joe Kemper will have an additional $1,600, he shared with us. The
whole tax relief will actually give him a $3,500 additional money in
his own pocket, of which $1,600 will be from getting rid of the double
taxation of dividends. I hope you didn't mind me saying that, Joe.
But the point is, is that -- I think Joe will tell you, he's not one
of these super-rich in America. He's a guy who served his country. He
worked hard all his life -- $3,500 means something to him.

When you hear the debate about this kind of class warfare, rhetoric
about, oh, this is for the rich, only for the rich -- I want you to
think about the Joe Kempers of the world. I certainly will. A fellow
who worked for our government, and now a fellow who we trust with that
$3,500, because it's his money. And when he invests it, it's going to
have a positive effect. All the Joe Kempers of the world taking that
extra money and investing it will mean somebody else is likely to find
a job, and that's important for our fellow Americans to understand.

We met with Tim Roberts and the Lanes, Brian and Wendy Lane. They
were -- they are younger parents. The tax relief plan will mean they
will have more money to invest for their children. When they set aside
the -- some of the money that they get in a child's education trust,
for example, and that compounds over time, it means it's more likely
that that child is going to have a pretty good nest egg. The more
money they have, the more likely it is they'll be able to save for
their children's future.

If we get rid of the double taxation of dividends, it means that
one of the good investment vehicles for a child who is young today,
will be a dividend paying stock, because not only will the person be
able to get the yield, the person will get the appreciation of the
company in which they invest.

These good couples work hard for their children. They make
sacrifices for their children. And it makes sense for our tax policy
to reward them for their sacrifices.

The plan we've laid out is good for job creation. The plan we've
laid out also speaks to the aspirations of many of our citizens. And
that's very important for Congress to understand when they debate this
plan. It speaks for the aspirations of the senior citizen to have a
comfortable lifestyle when they retire. It speaks to the aspirations
of the moms and dads to be able to invest for their children. It
speaks to the aspirations of a person looking for work today. It
really speaks to the hopes of our country that we want our economy to
be as strong as it possibly can be, as we take on some of the great
challenges which this country has ever faced.

This country will accomplish anything we set our mind to. We will
achieve peace in the world. We will work for freedom, not only here in
America, a free and just society. We believe in freedom around the
world because everybody has got worth. See, one of the great
principles of America is everybody has dignity. Everybody counts.
Everybody matters. As I said in my State of the Union, liberty is not
America's gift to the world. It is God's gift to human -- mankind,
and that's what I believe.

And as we think about how to have a better society and a more
peaceful world, we've got to trust in the wisdom and strength of the
American people. After all, the American people is this country's
greatest asset.

I boldly predict that with good policy this economy will be
strong. I boldly predict that with wise diplomatic policy the world
will be more peaceful. And I can predict that, because we happen to
live in the greatest nation on the face of the Earth.